In 1977 Paul and Lentz published results of social learning therapy, also called token economy, for chronic psychiatric inpatients of state mental hospitals. The enormous success of token economy therapy both for the patients' mental health and for cost effectiveness led Paul and Lentz to conclude that this therapy was the treatment of choice for the chronically mentally ill and would overtake active milieu therapy and medications/custodial care. A study was conducted which surveyed Veterans Administration Medical Centers nearly 8 years after the Paul and Lentz study to see if this had occurred. The 20 Veterans Administration Centers which had psychiatric inpatients all responded to the survey questionnaire which asked about their use of and opinions on the token economy system. The survey results revealed that only one percent of all psychiatric patients were treated with token economy therapy. One half of those centers with inpatient services used this type of therapy. Staff resistance, staff shortages, and difficulty in referrals were given as problems with the therapy. The Diagnostic Related Group payment system may reduce funding for this inpatient care and further decrease the use of token economy. (ABL)